The prime minister’s grand vision of a “high wage, high productivity economy” is at odds with the “true nature” of the UK economy today, a Scottish Friendly spokesman has warned.
Boris Johnson revealed his hopes for Britain in his “we’re getting on with the job” speech at the Conservative Party’s annual conference last week.
The PM said the UK currently had “one of the most imbalanced societies and lop-sided economies of all the richer countries”, but insisted UK Government policy would deliver future prosperity.
‘Alarmingly fast-paced cost of living crisis’
Kevin Brown, of savings specialists Scottish Friendly, fears Mr Johnson may be underestimating the scale of the challenge ahead.
Mr Brown said: “His words failed to mask the true nature of the UK’s economy today.
“Johnson is riding a wave of ONS (Office for National Statistics) figures on wages that fail to account for the alarmingly fast-paced cost of living crisis.
“It is creating a vicious cycle for UK households that could throw millions into dire financial straits this winter.
Household budgets under pressure
“Our own analysis estimates that households are already swallowing at least £441.64-worth of energy and petrol price rises on average this winter.
“If petrol prices surpass £1.60 per litre, then households could be forking out over £700 extra per person – or over £1,200 for a couple who both rely on cars to commute, which is not uncommon outside London.
“With petrol and energy weighting around 40% of the ONS basket of inflation, the total hike in the cost of living could still be far higher than this.”
Mr Brown added: “This is, in short, totally unsustainable. Wage increases are well and good, but if the cost of living is surging at the same time, then any of those gains will be wiped out.
“And let’s not forget that from April, workers will also have to swallow big tax increases from the National Insurance hike, which will add at least another £254.15 to the tax bill of a median wage earner.
“Let us hope the chancellor has some rabbits up his sleeve at the end of the month to provide relief.
“As it stands, the Bank of England and prime minister are washing their hands of the issue, and the outlook for the rest of us is just plain grim.”
Scottish Widows sees good and bad signs in latest financial health check